State university officials, who have fought to keep secret the financial details of how campus foundations manage nearly $2 billion, have withdrawn their opposition to public disclosure under a compromise with public records advocates and state Sen. Leland Yee, D-San Francisco.

The agreement, meant to protect the identity of most donors, means the public is a step closer to being able to scrutinize foundations like the one at California State University Stanislaus that hired former Alaska Gov. Sarah Palin to speak at a fundraiser last year but wouldn't say how much it was paying her until a judge ordered the contract made public.

CSU and University of California officials say they will no longer oppose SB8, introduced by Yee, which would require campus foundations and other "auxiliary enterprises" such as campus bookstores to operate under the California Public Records Act.

"The CSU has always been in favor of transparency, but we've been concerned about donor privacy," said Mike Uhlenkamp, a CSU spokesman. "With new amendments, these concerns have been put to rest."

CSU has at least 23 foundations raising money for its campuses, and dozens of auxiliary enterprises, all managing more than $1.3 billion.

Under the records act

UC has one foundation for each of its 10 campuses, all managing more than $600 million. Lacking nonprofit status, UC's auxiliaries already fall under the records act. So do community college foundations because, as local agencies, they are subject to the Brown Act, which mandates that city and county meetings be public. But a foundation run through the state office of Community College Chancellor Jack Scott would fall under the records act for the first time.

Tax exemptions

Although money donated to foundations comes from private sources, donors typically claim a tax exemption - a move that Yee said transforms the money into public dollars.

"When you take those private dollars and put them into a public institution, the university has an obligation to explain how those dollars are being used," Yee said. "If you take a tax deduction, it does fall into the public domain."

But former Gov. Arnold Schwarzenegger vetoed two similar bills by Yee after hearing vigorous opposition from UC and CSU. University officials had feared the scrutiny would unfairly disclose the names of donors wishing to remain anonymous - and prevent some from donating at all.

Under the new bill, donors would be identified only if they accepted a gift or services from the university valued at $2,500 or more, or if they won a no-bid contract within five years of their donation.

Earlier versions

Previous versions of the bill had set the threshold at $500, which could have triggered disclosure of anyone who'd donated in exchange for a good parking spot or a seat on the 50-yard line.

UC officials - used to an adversarial relationship with the senator, who has acted as a university watchdog - took a moment to clap Yee on the back.

"Sen. Yee, his staff, and the sponsors of SB8, in particular the California Newspapers Publishers Association, are to be applauded for negotiating a compromise that provides for greater transparency and accountability without sacrificing privacy protections," said Steve Juarez, a UC associate vice president.

Besides the Palin event, Yee's office cited five incidents of improper or questionable use of foundation funds, including $27,000 to remodel the Sacramento State University president's kitchen in 2007.